Real Estate Prices Growing a Lower Rate

It seemed like it was never going to happen for a while but the Brisbane real estate market has finally started showing signs of a slow down. In recent months, prices have flattened, which is a new development in a market where house values have increased every year in recent memory.

After the recession of the early 1990s, house prices in Brisbane stagnated. During that time, property prices did not move much at all. There was no property crash, as such, but the value of people’s home barely increased.

However it didn’t last forever, and prices were soon on the increase. The 2000s then brought one of the biggest property booms in history. Prices have increased every year since then and until recently have showed no sign of slowing down. Increases in property prices have far outstripped increases in average salaries, leading to a calibration issue with these two metrics.

For many years people have been saying that these price rises cannot last much longer. Homes have become largely unaffordable for many young families as investors continue to snap up properties and banks offer more flexible mortgage products.

However there are finally signs that prices are about to plateau. Figures released recently show that the average price of a home in Brisbane has increased by only 0.1%, or one basis point, over a one month period. This is big news despite the fact that prices increased as opposed to decreasing. It is one of the smallest monthly increases in the average value of property in many years.

This is cause for celebration in some quarters, particularly those where people are being priced out of the market. Lots of workers, such as low income earners, have been falling further behind the market for many years. A slow down in the increase in house prices might just help people to get a foot on the property ladder.

While the statistic is a positive sign for people hoping to buy their first home, it is not welcome news for property investors. Investing in property is big business in Brisbane and popular all across the country. Many people invest in residential homes to shore up their pensions. These investors rely on house prices to increase in order to build equity. Slowly increasing property prices is therefore not welcome news to investors.

The same could be said for real estate agents. When the market slows fewer people are willing to put their homes up for sale in fear of achieving an unfavourable price. This means that there will be less business out there for real estate agents to do and they will, in turn, make less money through commissions.

It is early days yet, however, so there is likely no need for investors and real estate agents to panic. The market might be slowing down for a short period of time, but there are no signs that a crash is on the way. Brisbane real estate prices should be safe for some time yet.

Find out more about the Brisbane Real Estate Market and keep in touch with the latest news and developments http://www.brisbanerealestatemarket.com/